There are five major changes coming to FAFSA. Here’s what they are:
- The FAFSA is getting shorter: The number of questions on the FAFSA form will be capped at 36. This is a significant reduction from the current 108 questions. Some tax information – like tax returns – will also be automatically imported going forward, which will simplify the process for federal aid applications.
- The Expected Family Contribution (EFC) is being replaced: Currently, each student is assigned an EFC based on factors such as family income and number of household members. This will be replaced by the Student Aid Index (SAI) to make more clear to students that this number is used to decide on an appropriate amount of aid, rather than requiring their families pay a specific amount of money. The SAI can also be negative for low-income students most in need of aid, which isn’t the case for the EFC, which can only go as low as $0.
- More people will soon be eligible for Pell Grants: Pell Grant eligibility will no longer be based on EFC, but instead on gross income and family size. Students currently excluded from eligibility for drug-related convictions as well as incarcerated students in prison education programs will also become eligible for Pell Grants, as will people who qualified for student loan cancellations in the past.
- The time limit for Direct Subsidized Loans eligibility is changing: The current federal student aid rules limit eligibility for Direct Subsidized Loans to 150% of the time a school says it will take to complete an academic program. This will no longer be the case, and students will be able to get aid for as long as their schooling actually takes. This doesn’t mean Direct Subsidized Loans are unlimited, though. You can still max out your loan eligibility.
- Financial aid administrators will have more opportunity to offer aid during national emergencies: More flexibility will be provided to offer additional aid by taking into account prolonged periods of unemployment during a disaster.
What this means for students and parents
Because these changes make the FAFSA easier to complete, it may mean more future college students and their families fill out the forms and become eligible for federal financial aid. The EFC rules change that makes it easier for schools to identify students with substantial financial need may also open up the door for more people to get an affordable college education.
This information was provided by Credible. They offer a listing of private loans here.